Munich Personal RePEc Archive

The Political Economy of Foreign Direct Investment in Turkey 1950-1980

Dumludag, Devrim (2002): The Political Economy of Foreign Direct Investment in Turkey 1950-1980.


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In the Turkish Republic, especially in the 1960s and 1970s Foreign Investment was regarded as a very suspicious subject as a result of the capitulations and a substantial amount of Ottoman Debt. There were many debates about the issue in the press and in public and most of the stuIes in hs period had generally a normative way of looking at the Foreign Direct Investment (FDI) issue.

Although Law 6224, the encouragement of Forelgn Investment, which was designed as a liberal law, was enacted in 1954, it was used as a law discouraging forelgn investment due to this suspicious attitude. During this period a very small amount of FDI entered into Turkey and its share was very insipficant in the Turkish economy.

When we compare the amount of FDI corning to Turkey with the corresponding amounts in some other developing countries we clearly see that our findings strengthens that the share of FDI in Turkey is insignificant. These countries enjoyed an inflow of FDI averaging one-three bdhon dollars per year while Turkey received averapg eight-ten million dollars per year in this period.

This thesis studies the FDI in Turkey between 1950 and 1980 and examines the contribution of the FDI to the economic growth, employment and tax revenues. In addition, it aims to ascertain the obstacles and impediments that obstruct the greater flow of private foreign investment into Turkey.

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